4 ms·
They held cash at SVB. They will probably smarten up and start holding short term treasuries and avoid as much as possible bank liabilities. Just a guess.
by lifty 4y ago
They held cash at SVB. They will probably smarten up and start holding short term treasuries and avoid as much as possible bank liabilities. Just a guess.
- rabf 4y agoTha majority of their reserves were in short term tresuries, only a fraction of thier reserves were stored in 4 different banks as cash in order to be able process redemtions.
- lifty 4y agoSo I guess for them the only option for their short term redemption buffer is to keep money in the 4 systemically important banks. There are no other options. Relevant note, FED won't approve full reserve banks (several tried) as they might suck too many deposits out of the rest of the banks, posing a risk to the other banks.